The Financial Intelligence Authority (FIA) and the Uganda Registration Services Bureau (URSB) entered into a memorandum of understanding this morning. The MOU was signed at the URSB premises. This marks one of the many partnerships that the FIA, and URSB alike have entered into to ensure that that they both achieve their respective mandates. The Anti-Money Laundering (AML) Act of 2013 imposes a number of duties on the different players in the fight against money laundering. These players are referred to as accountable persons in Section 1 of the AML Act 2013 and are clearly listed in the Second Schedule to the Act. The Registrars of Companies are listed as accountable persons.

Execution of the MOU signals the URSBs commitment to complying with the AML Act, and support to the FIA in achieving its mandate.

While the URSB is mandated to register business names, companies, business documents, intellectual property like trademarks, patents, copy rights, utility models, to mention but a few, the FIA is a body corporate established under S.18 of the Anti-Money Laundering Act Cap 12 of 2013 with a mandate to combat money laundering and deter the financing of terrorism in Uganda.

Money laundering, simply put, refers to a financial transaction scheme that aims at concealing the identity, source, and destination of illicitly-obtained money. The money laundering process can be broken down into three stages. First, the illegal activity that garners the money and places it in the launderer’s hands. Second, the launderer passes the money through a complex scheme of transactions to obscure who initially received the money from the criminal enterprise. Third, the scheme returns the money to the launderer in an obscure and indirect way.

Often, criminals achieve these objectives through the use of companies mainly shell companies, holding companies, etc. These companies, say the shell companies, are incorporated companies that possesses no significant assets and do not perform any significant operations. To launder money, the shell companies purport to perform some services that would reasonably require its customers to often pay with cash. Cash transactions increase the anonymity of customers and therefore decrease the government’s ability to trace the initial recipient of the dirty money.

The purpose therefore of signing this MOU is not only to ensure cooperation between the two entities through transparent information sharing for effective and streamlined regulation of the financial and commercial business sector but also to mutually benefit both organizations in realizing their respective mandates.